Mainstreet Junction Business Plan — Market and Site Analysis

Traffic counts on the arterial corridor, the catchment, competing forecourts and why this site supports the volume assumption.

Market and Site Analysis

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4.1 The national picture
4.2 The site
4.3 Catchment and demand build

4.1 The national picture

Figure 6. The South African fuel retail market.

Fact	Implication for this project
South Africa has roughly 4 500 licensed retail service stations serving a vehicle parc of around 12 million.	The market is mature. Growth for a new site comes from taking share within a catchment, not from a rising tide.
The six major brands — Engen, Shell, Astron Energy (Caltex), TotalEnergies, Sasol and BP — control most branded sites, with a growing independent and franchise tier.	A branding agreement is effectively a condition of bank finance and of supply security.
The RAS benchmark service station pumps 233 000 litres of petrol a month, costs about R9.5 million to build and R3.6 million a year to operate.	This site is modelled at roughly double the benchmark volume, which is what a well-located arterial corner should achieve.
The Fuel Retailers Association has put the viability threshold at above 300 000 litres a month.	The Year 1 cash break-even of 318 000 litres sits marginally above that threshold, which is the honest characterisation of the opening year.
Fuel sales typically account for 80 to 90 per cent of a station’s turnover.	This site is at 83 per cent, consistent with the sector, which is why the non-fuel gross profit share is the differentiator.
The retail margin makes up roughly 15 per cent of the inland petrol price.	The retailer captures a defined slice of a much larger number, and only in a freehold structure does it retain the whole slice.
Convenience retail has been the sector’s structural growth story for a decade.	Every major brand now runs a developed convenience format; this is where competitive effort is directed.
Electric vehicle penetration remains well under 1 per cent of the parc.	A long-dated risk rather than a near-term one, but a site financed on a ten-year loan should still make provision.

Figure 7. Porter's Five Forces intensity assessment.

Supplier power scores highest, and it is structural rather than negotiable: the oil company sets the supply terms, the branding conditions and — through the RAS margin split — a share of what the retailer earns. Rivalry is high because the market is mature and a new site takes share rather than creating demand. Buyer power is low, unusually, because petrol pricing is regulated and motorists cannot shop on price; they shop on location, forecourt service and what else the site offers, which is exactly why the convenience proposition matters.

4.2 The site

The modelled site is a 2 400 m² corner property on a Gauteng arterial route carrying commuter, light-commercial and minibus taxi traffic, with residential density within a 3 km catchment and no competing forecourt within 2.5 km in the primary direction of travel.

Parameter	Assumption	Basis and verification required
Passing traffic	Approximately 28 000 vehicles a day, both directions	Independent 7-day traffic count split light and heavy — a licensing requirement and the single most important diligence item
Capture rate	Approximately 1.6% of passing traffic at maturity	Benchmarked to comparable corridor sites; must be validated against observed competitor throughput
Average fuel transaction	Approximately 38 litres	Blend of passenger vehicles and light commercial
Shop conversion	Approximately 34% of fuel customers enter the shop	Industry norm for a developed convenience format with a quick-service anchor
Average shop basket	Approximately R118	To be tested against regional convenience benchmarks
Mature throughput	480 000 litres a month	Roughly double the RAS benchmark station volume of 233 000 litres a month

Figure 8. Throughput ramp against industry benchmarks.

4.3 Catchment and demand build

Demand source	Character	Share of throughput	What secures it
Commuter traffic	Twice-daily passing volume in both directions	Approximately 45%	Position on the primary direction of travel; forecourt speed at peak; loyalty programme
Light commercial and delivery	Diesel-weighted, refuelling on route during the working day	Approximately 25%	Diesel pricing, forecourt access geometry for larger vehicles, and account facilities
Minibus taxi	High-frequency, high-volume, diesel and petrol	Approximately 15%	Reliability of supply, speed of service and a relationship with the local association
Local residential	Within a 3 km catchment; combined with the shop and car wash trip	Approximately 10%	The convenience offer, the quick-service tenant and the car wash bundle
Destination and pass-through	Longer-distance traffic stopping for food or fuel	Approximately 5%	Visibility from the road, the pylon and the quick-service brand

The demand mix explains the product split. A corridor site with 40 per cent of its throughput coming from light-commercial and taxi traffic is necessarily diesel-weighted, which is why the plan models 48 per cent diesel and accepts the R0.70 a litre margin penalty that comes with an unregulated retail price. A purely commuter site would carry a higher petrol share and a better blended margin, but would also carry lower throughput per pump and a sharper weekday peak.

The catchment is not the constraint on this business. Twenty-eight thousand vehicles a day at a 1.6 per cent capture rate produces roughly 448 refuelling transactions a day, which at 38 litres is 17 000 litres — close to the mature monthly figure divided across 30 days. The constraint is whether the capture rate is achievable at that location against the competing forecourt 2.5 km away, and that is a question the traffic study and a competitor throughput observation answer, not a business plan.

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